GBP/USD – 1.3263
Original strategy :
Buy at 1.3125, Target:1.3300, Stop: 1.3065
New strategy :
Buy at 1.3170, Target:1.3370, Stop: 1.3110
Cable only eased to 1.3161 before finding renewed buying interest and sterling has surged again today, current breach of previous chart resistance at 1.3269 confirms medium term upmove has resumed, hence further gain to 1.3300-10 and later 1.3350-55 (50% projection of 1.2109-1.3269 measuring from 1.2774) would be seen, however, near term overbought condition should limit upside to 1.3390-00 and price should falter below 1.3440-50, bring retreat later.
In view of this, would not chase this rise here and would be prudent to buy sterling on subsequent pullback as said support at 1.3161 should limit downside, bring another rise later. Only below previous resistance at 1.3080-85 would defer and risk test of 1.3030-33 support, break there would suggest a temporary top is formed instead, risk correction to 1.2990-00 first.
Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200.